Gas prices: Why so high? Mike Wirth, Chevron CEO, explains

Mike Wirth has bad news for consumers. Those eye-watering prices you see at the gas station? They may go higher.

Chevron CEO believes that currently List price $95 The price per barrel of crude oil will reach $100 and will rise further.

“It certainly looks like that ($100 a barrel is going to happen),” Wirth said. Bloomberg TV. “We’re certainly moving in that direction. Supply is tightening, inventories are drawing down, these things happen gradually – you can see it increasing.”

However, while Voss said consumers are “close” to seeing fuel prices hit the $100-a-barrel threshold and trends suggest prices will only continue to rise, he and other economic experts believe consumers will be able to handle the pressure.

Why are natural gas prices so high?

Oil prices, as well as gasoline and diesel prices, are rising due to political tensions and geopolitical factors.

exist April Some members of the Organization of the Petroleum Exporting Countries (OPEC) – including the United Arab Emirates, Kuwait, Oman, Algeria and Kazakhstan – announced they would begin limiting production, cutting about 1.15 million barrels per day, to stabilize oil supplies. market.

Meanwhile, Russia – another oil-rich country, although not a member of OPEC –has stated that it will not sell its products directly or indirectly After Russia invaded Ukraine, the United States imposed price caps on the commodity.As President Biden has already said, retaliatory actions will not cause further damage to prices Ban on imports of Russian oil into the United States, causing prices to skyrocket.

the most important is Deadly floods in LibyaAnother OPEC country – which OPEC claims typically produces about 1 million barrels a day – could further disrupt oil supplies this month.

Will natural gas always be this expensive?

Experts predict that prices will ease in the future.

Voss said the current highs suggest the market is not yet mid-cycle, adding that these trends have not prompted Chevron, the second-largest U.S. oil company, to change its long-term price expectations for oil.

“We really don’t change (our long-term prices) very often,” Voss explained. “We’ve been in a volatile market, actually dating back to the pandemic, when things were down, when the economy was recovering, when the economy was up, and during the war. It’s a time when prices are unpredictable and volatile.”

this U.S. Energy Information Administration There’s even better news: Although average prices are expected to rise in the fourth quarter of 2023, they will fall back in the second quarter of 2024.

It explained that Brent crude could average $93 per barrel in the final months of the year (a scenario supported by falling global oil inventories) before falling back to $93 per barrel by mid-2024 as oil inventories rise again US$87 per barrel.

Will rising oil prices affect the economy?

Despite its fierce warnings, the Fed took pains to introduce measures to reduce inflation, surprising even its critics.

Viewers have reason to worry that the work could be undermined simply because of gas prices – after all, more than Rise by half The consumer price index fell in August, led by oil.

But Voss expressed confidence in U.S. consumers, saying a price of $100 a barrel was higher than “our long-term expectations.”

“I think there will be some economic impact, but for most of this year, and certainly all of last year, we had relatively high oil prices,” he said. “The recession that everyone is talking about is not here yet, so I think the underlying drivers of the U.S. and global economy are still pretty healthy.

“I think it’s a drag on the economy, but so far the economy has been able to tolerate it.”

Where can I find the cheapest gas in the United States?

The West Coast is statistically one of the most expensive states to buy natural gas Public service website AAA.

Natural gas is the most expensive in California, with the average price of regular oil at $5.793 per gallon. Mid-grade fuel costs $5.992 per gallon, and premium fuel costs $6.148 per gallon.

California is followed by Nevada at $5.057 per gallon, Washington at $5.043 per gallon, Hawaii at $4.836 per gallon, and Oregon at $4.688 per gallon.

Conversely, motorists on the East Coast and South enjoy the lowest gas prices. Mississippi ($3.296 per gallon) has the lowest prices in the country, while Georgia ($3.356 per gallon), Louisiana ($3.395 per gallon), South Carolina ($3.411 per gallon) and Alabama ($3.411 per gallon) $3.418 per gallon) rounded out the bottom five.

The price difference is down to a range of factors, including proximity to refineries, ports, pipelines and blending terminals, and tax.

Prices tend to be the highest and most volatile in California because of the state’s high gas taxes and Gasoline plan more stringent than federal government–Few refineries are producing the product.

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